Exchange Of Property Contracts – What Happens?
Posted on 7th July 2020
Our Solicitors in Preston know that exchanging contracts is exciting, but it can also be tricky. What should you expect and what should you watch out for?
Why do we have to exchange contracts?
Without the exchange of contracts neither side is legally bound to either buy or sell the property. Up to the point of exchange both the buyer or the seller may withdraw from the transaction without being penalised for it. Exchange of contracts is often the point where everyone breathes a sigh of relief as it is incredibly rare for anyone to pull out of the transaction once exchange has taken place.
When do I exchange contracts?
Generally, your Solicitor will generally look to exchange 7 days before completion although you can exchange contracts on the day of completion. Once exchange takes place you will be legally committed to buying the property so your solicitor will want to ensure that everything is in place before the exchange so there is less chance of anything going wrong. At lot of this work will involve checking the Contract Pack.
What do I need to exchange contracts?
- Ensure that you have had the valuation and any surveys you want
- That you have a formal mortgage in writing or if you are a cash buyer ensure you have the funds in one bank account and that you can transfer it to your Solicitor in time for completion
- If you are buying with a mortgage, ensure that you have the mortgage deposit
- Ensure you are happy with the search results
- You must ensure that your buildings insurance is in place from the day of exchange
- Ensure that the contract deposit (usually 10%) is sitting in your Solicitors Client account
- An agreed date for the completion. This date must be a fixed date as it must be written into the contract
- That you have read, understood, and signed the contract
Can I sign the contract before exchange?
Your solicitor will need to hold your signed contract before they can exchange. Both you and the buyer or seller will be asked to sign identical contracts, your Conveyancing Solicitor will then hold the contract on their file until you give your authority to exchange. Once you and the otherside have given their authority, your Property Solicitors will agree upon a date and time to exchange contracts.
Can I exchange and complete on the same day?
Yes, you can and in some instances, it can be quicker but like everything this process has pros and cons. There is no doubt that a simultaneous exchange and completion speeds the process up but if you are physically moving in to or out of a property you won’t definitely know that you are moving until the day of the move which obviously makes arranging removals and forward post a little more difficult.
How do I exchange contracts?
Both sides Property Solicitors or Conveyancers will read out the contracts over the phone to ensure that the contracts are identical, they time and date when they did this and then immediately send them to one another in the post.
What happens after the exchange of contracts?
After exchange things should be relatively plain sailing to completion. In between exchange and completion we recommend you do the following:
- Visit the property with the estate agent, ensure all fixtures and fittings you agreed on are in place and nothing has been damaged. Take pictures of the meter readings (you should do this on the day of completion too) in case of any dispute at a later date.
- Tell the utility companies what day you will be completing
- Tell your bank, building society, pension holders and anyone else you can think of that you are moving
- Change your address on your driving license
- Organise post forwarding
- Book your removals
MG Legal’s Property Solicitors in Lancaster, Garstang and Preston, have extensive knowledge of the conveyancing process, including dealing with freehold and leasehold sales and purchases, new build purchases, help to buy transactions, transfer of equity, remortgages and general property advice. Contact us now for a quote via contact firstname.lastname@example.org or call Lancaster 01524 581306, or Preston 01772 783314, or our property solicitors in Garstang on 01995 602 129.
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